Mumbai-based Housefull said it stopped selling its furniture on Mebelkart in February after the digital marketplace failed to clear dues of up to Rs 28 lakh.Shashwati Shankar&Payal Ganguly | ET Bureau | Updated: April 27, 2016, 09:05 IST

It followed that up with a legal notice to Mebelkart seeking payment of the dues and Rs 150 crore in compensation for damaging its reputation and brand goodwill.

“After terminating our partnership with (Mebelkart), later in March we started receiving negative feedback from market associates about our products being fake and definitely not resembling the original quality,” said Akshay Chaturvedi, cofounder of Housefull International.

While Chaturvedi insisted that Housefull had suspended its 21-month partnership with Mebelkart, Rahul Agarwal, CEO of Mebelkart, insisted that Housefull “was delisted from the website due to non-compliance with our terms and conditions”.

Agarwal confirmed Mebelkart was served a legal notice from Housefull on April 24. “We would like to clarify that ‘Housefull’ is a generic term and several sellers use the ‘Housefull’ word in their product descriptions,” he said. “There is no product under the ‘Housefull’ brand name being sold and no use of any trademark of the said brand.”

AskMe, a unit of Getit Infomedia, owns 75% of Mebelkart after it invested $20 million (about Rs 130 crore) in the company in August. Mebelkart’s promoters own the balance 25% stake. AskMe is backed by Malaysia’s Astro Holdings.

The dispute between Housefull and Mebelkart highlights the need for strong legal safeguards in the absence of stringent and well-defined policies to govern Indian ecommerce.

In September, Mumbai-based saree distributor Shree Meena Creations sued Amazon, Flipkart and eBay for allegedly selling replicas of its designs. In January last year, ShopClues was served a notice by Harman International, makers of the JBL brand of headphones, for allegedly listing counterfeit products.

Archana Khosla Burman, partner at legal services firm Vertices Partners, said contracts between merchants and marketplaces should factor in “an obligation on the marketplace to not be entitled to replicate any product of the seller on its platform at any point of time without the written consent of the seller”.